Liberalization–Goals Trade-Offs

Abstract

Equity, efficiency, security and liberty are the four main policy goals in a society. This paper examines the current trade-offs of these goals with agricultural trade liberalization for developing countries. Trade liberalization may cause contradictory results for developing countries. While trade liberalization may improve the welfare of a country, the distribution of income in that country may deteriorate. Efficiency, on the other hand, is another concept that depends not only on who defines it, but also on how it is defined. Liberalized trade may increase the efficient use of resources; however, it may also harm sustainability. Free trade may pave the way for liberty; however, new regional trading blocs may curtail the free choice of states, causing greater interdependence. Trade data over recent years show a decreasing share of total trade in developing countries despite an increase in the absolute value. Thus, liberalized trade in agriculture could help developing countries to achieve these universal goals if it were accompanied by decisive reforms and supported by international consciousness.